NOG is assuming 54k after tax and health insurance.

Your comment insinuating that he "believes this because he has done the math" is rather ridiculous since it is pretty obvious he hasn't even bothered to do a simple rent/buy calculation.

Anyway, from my understanding the digression starts here: "It really ain't that much anymore. I'm older than the 30-somethings ITT, and I have no debt but a normal size mortgage pmt, and no kids at home, and I can't imagine living on $100K." at post 190.

I'm curious what he thinks a normal size mortgage payment is since its closer to 1200, whereas he thinks he's paying 1500ish for a starter home. People like to toss around "doing the math", but rarely does anyone bother.

NB: I'm using a median US housing price and 30y mortgage to come up with "normal". Either way when he places "starter home" safely above the median home price. Its pretty clear something is way way wrong.

When was the "city of the kind we are considering" defined? I may have missed it, but I think you may have just assumed that when people discuss these things they are talking about the city that you live on (or one like it).

Also, being a young male doesn't mean that you want to be close to the nightlife. There are many people that don't want to be going out to clubs/bars/etc. all of the time. Hanging out with friends at their houses/apartments is enough for many many people. If I had infinite money I still wouldn't go out very often. I'd rather be able to hear what my friends have to say and engage in conversation with them in my own home.

Is the median the correct number to use? Likewise, is the national market the correct metric?

I would disagree with both of those given we are talking about people making $100k which is being held out as a large amount.

I'm also not sure who introduced starter home but again I would not expect what I normally associate with stater home being in the range of housing considered by someone who is well-paid.

How exactly do you propose comparing people other than to the average person? Are we going to magically exclude everyone below average to recompute "above average"?

When you start hand waving and shifting goalposts it becomes incredibly hard to have a discussion.

Atleast we agree on the starter home issue. Could you go back and read what NOG wrote before you blindly defend him? Thank you. He assumes that take home pay is 54k + health insurance. You cite a significantly higher amount. You disagree on starter home cost. And I'm sure there is basically nothing you will agree with him on once you and him sit down and talk about actual numbers, especially when he begins to quantify an "unimaginable lifestyle".

Also, why don't we use Cleveland as our sample city? It is a major metro area. The median home price is 105k. Surely our 100k earner can have a great life there.

mtgordon,

I was using some of Henry's personal preferences, though you are totally correct. Some people actually happen to like suburbia and quiet neighborhoods.

I concede I should probably have looked at his math before defending him. I do strongly agree with his conclusion so I assumed it was correctly justified.

Ipso facto >93% of workers make less than that, so unless you want to conclude that only < 7% of the population can live "quite nicely" its absurd.

To go beyond to what he said, he claimed to was "unimaginable" so subtract that portion away from the 7% we have.

We can ignore the cost efficiencies of couples. (Still live in 1BR. Perhaps still drive 1 car, etc. Reduction in food costs blah blah blah) Since I'm trying to be as liberal as possible.

Either way, when you use actual numbers and look at what he claimed to say. It is simply absurd. However, you aren't doing that. You're superimposing your own arbitrary set of restrictions (see you claims of city center/major metro/etc) on top of what he claimed. Many of these claims you don't even understand (Nor does NOG). You ignore vast amounts of cheap major metro areas because they're mostly horrible cities for young people to live in (Houston/Rust Belt/etc), but still toss around the phrase "major metro area".

http://www.forrent.com/apartment-com...1000000550.php

We can live in the downtown of a major metro for just over 1k yet you claim $1500 is the "bare minimum". Lets stop with the arbitrary hand waving and drop this subject. I'd rather discuss the ridiculous math that was used earlier to conclude homes appreciate at 6% a year.

people enslaved to property ITT

Well, lets put some numbers to it. I don't know much about the real estate market (other than superficially) but I googled and came up with an interesting site, trulia.

http://www.trulia.com/home_prices/Pe...phia-heat_map/

Click on Avg listing price, highest to lowest, avg sales price, median, etc, highest to lowest. All the areas closest to center city are the most expensive. These are also the most desirable places to live. Click on "popularity" highest to lowest however, and you get Northeast philadelphia and west mount airy as the #1 and #2 areas, which aren't nearly as expensive or desirable (in fact, undesirable due to location).

Median sales highest to lowest, top 10 or so, starts at 300k+, but the top few spots are more than double that. Average sales price is even worse, with the top 5 being all 500k+, and, once again, the most desirable places to live. Avg listing price is lol as the 9 out of the top 10 areas are all 500k+, with Logan square coming in at 490k.

Granted, these are all to buy property, but we're talking approx 2000 a month mortgage and that's without taxes. Renting we see anything in the desirable areas from 1,500-4,000 a month, 2 bedrooms and slightly lower for 1 bedrooms/studios on the higher end, but the lower end still is around 1,500 a month, and it's very safe to say you aren't getting a "nice place" for 1,500 a month in center city, period. I would say you could find a decent place for 2k a month, and for 2,000-2,500 the places get much nicer, which I would classify starting as "nice" (less than 10 years old, nice finishes and parking isn't even guaranteed).

Throw in a modest car+insurance (500 a month), groceries (300 a month), utilities (250 a month), and entertainment (400 a month), 4,500 dollars a month take home leaves you with 550 dollars a month left over. Mind you, that's with very modest estimates. Anything remotely considered nice, not lavish, in any of those categories and that 550 is gone. I feel bad even throwing in 400 a month in entertainment, as if you are a single male living downtown and go out 3 times a week, spending 33 dollars a night going out is beyond ridiculously low.

This isn't including wardrobe, gifts for things like weddings, birthdays, girlfriend gifts, etc. I may be off on some of my estimates here, but if we are truly being honest about living nicely in an urban atmosphere (and trust me, Philly isn't Paris), 100k just isn't much at all. Not even close.

I wouldn't consider using the examples of the top 10 metro areas in the US - NY, LA, Chicago, Dallas, Houston, Philly, Washington, Miami, Atlanta, Boston as good indicators of amount of money for a nice apartment being all that out of touch. A nice apartment in NY isn't really comparable to a nice one in 10th place, but let's face it - these are the areas where most people live.

Sure, there are 366 entries in the "top metro areas in the US" in wikipedia, but NYC is equal to the bottom 148 areas combined. The top 10 is 81 million people, but the bottom 356 is 180 million people. In other words the top 10 metro areas are equal to approx 33% of the entire group.

Edit : woops, made a big mistake with Cleveland. Cleveland is ranked 28th, with 2.06 million people, as every area in the top 10 is more than double that. I also would not consider moving to Cleveland, no offense.

haha so true

I made this point in post #21. The reason I find this interesting is that people do manage but yet I can't figure out how (I feel the same way about time). I believe the solution is that they accept things that I'm not considering as options. I feel being older is likely a factor here as my views of what is and isn't acceptable were formed before the middle-class started to disappear. Making the $60k twenty years ago allowed for greater financial freedom than making $100k now.

I think people will agree that if/when you get to $100k a year, you want $150k, once you get there you want $200k. Long story short, do what you like while still living comfortably.

Read again. My figure was $2000/month. I said from $4500 gross we have $2500 left after housing. That's about $1600 mortgage and $400 utilities, cable, internet, etc. It's very realistic, as was my entire scenario.

It isn't much. I have always tried to be 40% +. Actually now I make a high salary and don't spend that much more then I did starting out and am approaching 70% savings rate. 36 years old, paid off house and I could sit on my ass for about 20 years if I ever lost my job and tracking towards early retirement. That my folks is FREEDOM and in my mind beats going out every night having a good time. Yes there is a need for that too, it's all about balance. It's easy for someone like Henry17 to criticize the likes of me when he clearly inherited some lump sum amount of $

I'm in Canada too and yup. I'm controller at a construction related company so see everyone's cheques. Mechanics make around 150K in the company I work for. Some operators pulling in close to 275K (huge hours though) although average is closer to high 100's. One guy this month made 46K LOL.